Samsung Preps to Build Another Multi-Billion Dollar Memory Fab Near Pyeongtaekby Anton Shilov on March 1, 2018 10:30 AM EST
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Samsung has begun preparations to build another semiconductor production facility near Pyeongtaek, South Korea. The fab will produce various types of memory as the market demands, and if unofficial information is correct, the new fab may be larger than the adjacent fab that began operations last year.
At present the upcoming fab is called the P2 Project and it will be located adjacent to the existing fab near Pyeongtaek. Samsung has already started to establish infrastructure for the production facility — it ordered the construction of gas pipes for the new production facility in January and is expected to start other works shortly. ETNews reports that Samsung is looking at investing ₩30 trillion ($27.8 billion) in the new P2 Project facility, but does not elaborate whether the number represents total investments, or initial investments. ₩30 trillion is the total amount of money that Samsung has already invested and plans to invest in its existing fab near Pyeongtaek by 2021. Considering the fact that the P2 is in an early stage of planning, it is unlikely that the company has finalized its investments plans.
Officially, a Samsung representative confirmed on Wednesday that the company is considering building a second semiconductor production line near Pyeongtaek. The company anticipates that demand for various memory types will grow in the coming years and therefore has been discussing proactive investments in another production facility. So far Samsung has not decided whether to make DRAM or NAND flash chips in the facility, but considering potential size of the fab, it is possible that Samsung could simply split the facility and do both.
A particularly interesting thing about the P2 Project is the planned timescale. ETNews reports that that the building of the P2 facility “will be completed by the end of the first half of 2019”, which means that construction would need to begin shortly. Once the building is ready, Samsung will have to start equipment move-in. If the company plans to start installation of production tools in mid-2019, then a decision about the equipment (and therefore initial products made at the facility) will have to be made by the end of 2018 at the latest, since tools will need to be procured.
If the new facility is set to produce DRAM, then Samsung will need to buy lithography equipment from companies like ASML or Nikon. If the company decides to produce V-NAND at P2, then it will have to acquire lithography tools as well as a large amount of chemical vapor deposition (CVD) machines and high aspect ratio etch tools from companies like Veeco Instruments, Applied Materials, Adeka and others. Reuters claims that Samsung might start mass production of chips at P2 sometimes in 2020, which corresponds with the ETNews report and indicates that the company has a schedule for its P2 Project.
Assuming that the P2 Project is as large as the company’s existing fab complex near Pyeongtaek, it will take Samsung years to fully ramp up the facility. For reference, the existing fab isn't expected to be fully equipped, expanded and ramped until 2021. Given that the P2 will be used to produce memory chips well into the next decade, it is highly likely that its construction will be ready to accommodate the latest and upcoming production tools, such as EUV step-and-scan systems that will be required to produce DRAM using ultra-thin sub-10nm fabrication technologies.
- Samsung’s Multi-Billion Fab in Pyeongtaek Starts Production of 64-Layer V-NAND
- SK Hynix to Build a New NAND Fab, Upgrade Existing DRAM Fab
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boozed - Thursday, March 1, 2018 - linkHah, a giant Mondrian
Dragonstongue - Thursday, March 1, 2018 - linkis not a "shortage" of memory causing price spike (does not help ofc) but it seems all the "major players" are more or less matching price and speed and voltage almost to the dollar..I call this back seat deal making.
they can ramp production up 10million fold, but, like everything else, if they do not control end user pricing, it means nothing.
Just goes to show how wickedly profitable they are, must be all them super easy to break very expensive smartphones and price gouging on the memory that likely is only costing them 1/1000 of what they put on the market for.
Adramtech - Friday, March 2, 2018 - linkDragonstounge, really are you serious? 1/1000, after a $2-3B startup cost?
boozed - Friday, March 2, 2018 - linkSure!
After all, a single bottle of beer only costs cents to make. Never mind all of the machinery required to make it. That's all free... right?
mukiex - Monday, March 5, 2018 - linkMind you, price-fixing HAS happened in the past, but in general, yeah, the margins on this stuff is typically razor-ass thin.
They made enough profit at the old level of pricing, and at this point, they know full well that they would benefit from feeding more chips into the market. Hell, I wouldn't be surprised if we don't see one of the big mobile GPU players eyeing the PC market right now, given how strained supply is there.
wumpus - Sunday, March 11, 2018 - linkPrice fixing is the normal state of affairs. Back before the first convictions on memory price fixing, all the financial press was whining about "unending price wars" and actual competition. When they eventually stopped it was obvious that the fix was finally in.
A more cynical reader might assume that the regulatory interest was punishment for committing competition and that an easy analysis of [at least US] prices show collusion in at least half the available prices. Sometimes regulators try to fight this, not sure about the times when the memory industry was caught colluding.
The beer comment above is likely tragically on the money. Ambev (they own the Budweiser corp) brews nearly all beer sold in the US (and a ton of it worldwide) with the exceptions of [possibly, I think it was a regulatory deal], a rump Miller operation (that Ambev wasn't allowed to buy), Yuengling, Heineken, and the various microbrews (many of them by volume owned by Ambev). Note that (at least in the US), regulators are going to make sure that alcohol prices remain relatively high, and will tax any cheap alcohol up to snuff. It is a monopolist's paradise (especially when you can dictate to retailers what they have to do to be allowed to sell bud light and the rest of the Ambev line, and the retailers are often even more controlled by politically entrenched distributors). Their only real competition is hard liquor (which is typically brutally taxed. Ambev can simply up their prices and pocket the tax difference).
dromoxen - Friday, March 9, 2018 - link2-3Beelion? Go away , that doesn't even get you a seat (at the table) 27Bln or $40bln lay year. Of course this could be a penance investment for being released from jail. they could buy out AMD before breakfast and come back for Nvidia for lunch.
rpg1966 - Friday, March 2, 2018 - linkLol, we got ourselves a real live analyst here!
jordanclock - Friday, March 2, 2018 - linkOr all the manufacturers have the same bottom for pricing to keep making money? You're going to need a bit more evidence that the prices you find on the internet to point to price collusion.
Lord of the Bored - Saturday, March 3, 2018 - linkIn fairness, it isn't like memory manufacturers HAVEN'T been caught price-fixing before. But with the current demand, I don't think it takes a lot of effort to keep prices high.